Gold held steady on Friday, but was on track for its biggest weekly loss in six as escalating U.S.-Iran tensions drove energy prices higher, fuelling inflation fears and reinforcing expectations of U.S. interest rate hikes. Spot gold was unchanged at $3,970.35 per ounce, holding near its lowest level since July 1. Prices are down more than 3 per cent so far for the week. U.S. gold futures for August delivery fell 0.5 per cent to $3,973.10.
Gold price has fallen about 25 per cent since the U.S.-backed war with Iran began in late February, pressured by expectations that war-driven inflation could keep interest rates higher for longer. While gold is seen as a hedge against inflation, higher rates typically weigh on the non-yielding metal.
